Wednesday, November 30, 2011

Generation Y: 3 Social Shifts In Perception

Column Quick Summary:
  • Echo Boomers define themselves through their relationships.
  • Echo Boomers value time over money.
  • Echo Boomers buy products based on peer tips.

Echo Boomers see high value in their peers, whether that's in the form of personal relationships or peer suggestions. Facebook, MySpace and social media in general have contributed to a world where it's easy for Echo Boomers to engage their peers. For instance, the Millennial generation uses these social media at work, whether employers like this or not. Therefore, employers should note a few trends concerning Generation Y.

1. Echo Boomers define themselves through their relationships. Not only can you see this through social media, Echo Boomers also place a high value on personal interactions outside of work. In fact, the phrase "I have a life" came up a lot while talking with Echo Boomers when they mentioned that they disliked their current job.

2. Echo Boomers value time over money. Note:

And time is more valued than money. Millennials want flexible schedules and may prefer additional vacation days to cash bonuses.
In other words, offering more money to Echo Boomers to complete extra tasks per week may be the most ineffective strategy. A company could easily approach this generation with the idea of once you finish your work for the week, you're done regardless of how little time it took you and succeed.

3. Echo Boomers buy products based on what their friends or other peers mention:

Millennials are more likely to buy based on peer recommendations.
What this means is that social media and social avenues might be the most effective way to market to the Millennial generation, whereas normal advertising might indicate that your company sells poor quality products.

Tuesday, November 29, 2011

50% Don't Have Retirement Assets? Try Over 70%

Column Quick Summary:
  • 78% of Echo Boomers have no retirement assets.
  • Some Echo Boomers are too young for retirement savings.

An article spells out a potential retirement nightmare for Echo Boomers:

According to CNBC, more than 50% of those in Generation Y have not started to save for their retirement. It seems that while this generation does know the importance of saving money and is very aware of the state of the economy, this fact has not changed the general view on saving for retirement. Many young adults are of the opinion that they can start saving later in life so they won’t worry about it now.
The reality:

The only two good pieces of news on this front is that a few Echo Boomers are too young to have retirement assets and some are still in college and thus aren't saving for retirement.

Now for Echo Boomers, how much do you need for retirement? A lot of that depends on what you have planned for the future, and there are some good strategies to follow.

Monday, November 28, 2011

Are Echo Boomers Dumping Real Estate?

Column Quick Summary:
  • Low marriage rates will probably equal low home-ownership rates.
  • Housing requires time and money many singles do not have, especially single mothers.
  • Males seem to have other interests as well outside of home-ownership.
  • Currently, no socioeconomic trend indicates an upward trend in housing among the Millennial generation.

A while back, I posted Female Renters: Priorities Shifting? However, note from the linked Wall Street Journal article:

The factors driving this growth in single-mom renters are diverse, some of which were expertly explored in The Atlantic this month by Kate Bolick. As Ms. Bolick notes, 40% of children are now born to single mothers; and marriage is happening later and later (now at 28 for men and 26 for women), or not at all. Others have noted that single moms may also prefer renting to owning a home so they can avoid maintenance headaches.

Emphasis added

A couple of factors for real estate agents and those who work in the housing industry to keep in mind, especially when we evaluate socioeconomics and housing:
  1. I predict that serial monogamy won't produce the homeowners that marriage produces. There are multiple reasons for this: potential school system advantages, a similar demographic make-up, a stable environment. These opportunities tend to attract married individuals, especially the last one (stability) as people who are attracted to stability find marriage appealing.
  2. While working with customers, single moms of the Millennial generation reported home-ownership as a goal, but from a realistic perspective, there are multiple time and financial constraints regarding home-ownership (see "Should I Rent or Buy" for more details). Unfortunately, hindsight is 20-20 here: after the time and money on maintenance, taxes, insurance and mortgage payments take place, you might see some sell their homes at a financial loss.
  3. Single males seem to also lack interest in owning a home, though at this present time, single male Echo Boomers are more likely to be homeowners. There are arguments about this trend as well: for instance, do males generally buy homes when they don't marry? Consider this argument:
    Now meet the twenty-first-century you, also 26. You’ve finished college and work in a cubicle in a large Chicago financial-services firm. You live in an apartment with a few single guy friends. In your spare time, you play basketball with your buddies, download the latest indie songs from iTunes, have some fun with the Xbox 360, take a leisurely shower, massage some product into your hair and face—and then it’s off to bars and parties, where you meet, and often bed, girls of widely varied hues and sizes. They come from everywhere: California, Tokyo, Alaska, Australia. Wife? Kids? House? Are you kidding?
The United States is watching how socioeconomic factors are changing economic demand. If the housing industry could rely on increased housing demand as a population increased in the past, it must now prepare for a massive generation which has a large portion of individuals who may never want homes. At least, for now, I don't see a huge future housing demand coming from Echo Boomers. To answers Mish's question about U.S. real estate being undervalued: no, if we assume that much of the future demand of housing will come from Generation Y. They either aren't ready or they aren't interested.

Friday, November 25, 2011

"Will Echo Boomers Eventually Become Conservative?"

Each Friday, The Echo Boom Bomb will feature a common question among Echo Boomers and/or their parents concerning economics or finance for the Millennial generation. These questions are often asked by Echo Boomers and/or their parents that I survey or can be directed to my email at echoboombomb [at] gmail [dot] com. If you email a question, please be sure to keep it concise and direct.

Question: Other American generations have become more conservative over time. Do you see the same happening with Echo Boomers?

Quick Answer(s):
  • The definition of conservative and liberal changes with time.
  • Most current political views are reactions to modern events.

First, the question is predicated on a false assumption: as people age they tend to become more conservative. Consider this: what defines a conservative today is not what defined a conservative fifty years ago. In other words, people may find some values, like religion, social structure and education, more important later in their life, but still hold fairly liberal views on what those entail.

Echo Boomers hold political views reactionary to the events that took place in the past decade. For instance, they tend to be more isolationist than other generations (see Generation Y and the 2012 Election) because they've seen the United States lose money, time and energy by helping out other nations, while the United States failed to manage its own problems. Likewise, Echo Boomers see advantages in the liberal side in economics because of how they've seen conservative economics fail (we could endlessly debate whether conservative economics was employed, however, if a conservative has a bad economy for a while, the view receives the blame). Therefore, if 10 years of liberal policies failed, the zeitgeist would change to favor conservative policies.

Wednesday, November 23, 2011

Will Generation Y Become Cooking-Conscious?

Column Quick Summary:
  • Restaurant owners don't need to worry.
  • Echo Boomers see cooking as a social event.

The Echo Boom Bomb seldom mentions health and nutrition, however, a recent article spells out an interesting observation about cooking and Echo Boomers:

On the other hand, one-quarter of Millennials claim to “love” cooking. Further, consumers in their 20s and 30s are more inclined to experiment and to agree that cooking gourmet meals makes them feel sophisticated and smart -- suggesting that learning to cook and cooking for friends is viewed as a way to establish credibility among their peers.
Obviously, Echo Boomers see the social appeal of cooking, bringing together a multitude of people and impressing them with good cooking skills. But, at this present time, I don't believe that this trend will grow, as Echo Boomers - who lacked financial resources - still purchased food at many fast food places when I reviewed their accounts. Even Echo Boomers with more money, tended to dine at more expensive restaurants instead of cooking.

Restaurant owners might grow worried about a massive generation cooking (loss of a huge amount of revenue), but the food industry has been resilient even in the dismal economy. Even post 2008 (after the large hit), Echo Boomers were willing to continue going out to eat (the "eating out" trend declined among marrieds with children).

On the flip side, if I was advising a restaurant owner, I would suggest starting a restaurant where the customer "creates" their own food in a heavily social situation. This would appeal to Echo Boomers (the current "young" group in America) and attract the wealthy older types who like to be "hip."

Tuesday, November 22, 2011

Generation Y Wants Multi-Tasking Freedom

Column Quick Summary:
  • Echo Boomers want work flexibility.
  • Change your approach, correct your problem.

An article highlights that among Echo Boomers pay does always mean a better job. For instance:

more than two of five would accept a lower-paying job that had more flexibility with regard to device choice, social media access, and mobility than a higher-paying job with less flexibility
In other words, if you believe that focus is superior to multi-tasking, Generation Y will challenge your views: they enjoy multi-tasking.
Pertinent Side Note:

The very nature of a cell phone and social media, like Facebook, allow for multi-tasking to occur. In fact, a study counting the number of hours that workers spend on their cell phone, social networks, or doing other non-work related things would be quite fascinating (one radio talking head mentioned that it was 60% of workers' time, but failed to mention the study).

The corporate world, in general, has failed in this area. They still operate on the fallacy of the 40-hour work week, instead of the getting things done efficiently and quickly assumption. A company could easily arrange a policy where once you're done with work, you're done. Not only would work be accomplished quicker, but employees wouldn't feel trapped in a certain time frame - why be productive if you're stuck at the office for a minimum of 8 hours anyway? On top of that, jobs which require creativity, need more time away from the office anyway. An employees' best ideas don't come when they're at work, but when they're away from work (ie: the shower, an afternoon walk, Archimedes' famous bath, et cetera).

In other words, set your goals, distribute the work, and when employees finish their job, let them go (even if that takes them 2 hours). Not only would employees save time and be motivated, companies could avoid the numerous costs that come when employees try to "fill their day" with something to do (all at company costs, of course).

Friday, November 18, 2011

"What To Make of Millennial Female Burnout?"

Each Friday, The Echo Boom Bomb will feature a common question among Echo Boomers and/or their parents concerning economics or finance for the Millennial generation. These questions are often asked by Echo Boomers and/or their parents that I survey or can be directed to my email at echoboombomb [at] gmail [dot] com. If you email a question, please be sure to keep it concise and direct.

Question: What do you think about this trend among Millennial women?

Quick Answer(s):
  • Immediate skepticism to any assertion about "burning out."
  • Potentially, a different approach is behind it.

I'm always skeptical of anyone who answers why questions, including myself.

In the time that I've spoken with both male and female Echo Boomers, males seemed to have a different aim. Female Echo Boomers aimed for similar positions, like a Public Relations Consultant, almost as if they were following a script. For instance, when I asked males, "How do you see your life in five years," they would often laugh and respond, "I don't know." Females, by contrast, could describe things quite well. In a nutshell, I'm not surprised by this article given the attitudes by each gender.

Outside of that observation, I'm not sure how accurate or inaccurate that picture is across the United States and why this trend - if true - is occurring.

Thursday, November 17, 2011

Interview: Susan Walsh of Hooking Up Smart

The responses to the interview questions may not represent the views of The Echo Boom Bomb's author. These interviews are provided to inform readers of information from field experts and provide these experts with a medium where they can answer questions without any content changes. You can also read other interviews at this link.

In the past, I was asked about hooking up and I wrote a short post, Generation Y and the Hook Up Culture. However, I got in touch with Susan Walsh, who writes Hooking Up Smart. A quick introduction from her site:

Since earning my MBA in 1983 from The Wharton School, I have worked with companies and non-profit organizations to identify key challenges and opportunities, and formulate winning strategies. Launched in November, 2008, Hooking Up Smart brings together my passion and concern for young women with a professional, practical and systematic problem-solving approach.

[She also describes herself as a "cool mom" which is awesome.]

In other words, she is an expert in the hook up culture.

1. People have expressed interest in learning about the current hook up culture that's popular among Echo Boomers, and a few other generations. Given that you counsel young women (and it seems, young men too) on the hook up culture and hooking up smart, could you give a brief explanation of what the hook up culture is?.

  • Hooking up is a term to describe a sexual encounter between two people. It is a deliberately vague expression (providing plausible deniability), and can mean making out, having intercourse, or anything in between.
  • Hooking up has replaced traditional dating on college campuses, and has also become prevalent in the general population and culture. The hallmark of hooking up is the clear understanding between both parties that the encounter will be free from any expectations for further contact. It is designed to avoid the possibility of commitment. However, hooking up is still the primary pathway to a potential romantic relationship, although only 12% of hookups eventually lead to relationships.
  • The hookup script reverses the sexual norm; the pair becomes sexual first, before emotional intimacy or a relationship is established.
  • Hooking up is awkward for both sexes. Most students get drunk to relax inhibition about getting naked with a stranger. Research shows that hooking up is not something unplanned that happens when people drink. Rather, young people drink heavily with the full intention of hooking up later in the evening.

2. It seems like there's a lot of pressure on young women to "be like men" in any and all ways. What - if any - are the potential consequences and/or benefits to this pressure? And why does Western culture assume that it's a "man's world" (being a man, I hardly feel like it's our world 96.7% of the time)?

First, hookup culture is the consequence of the Sexual Revolution, which occurred as a result of the Women’s Movement and the introduction of the Pill. Once women were able to have sex without fear of pregnancy, and with the blessing of Second Wave Feminists, they set out to have sex without restraint, much in the way that men did. When colleges stopped acting in loco parentis, the stage was set with coed dorms, and the hookup became the prevalent mode of male-female sexual interaction.

What happened over a period of 50 years is the loss of assortive mating. That is, it used to be the case that sex was tied to commitment, and people often married their first sexual partners. People generally married a mate with similar characteristics – education, intelligence, socioeconomic background and physical attractiveness.

As casual sex became more prevalent, and the Women’s Movement provided opportunities for women to pursue more education and professional careers, the average age at marriage increased significantly. In the meantime, both men and women seek sex, whether casual or in long-term relationships. However, they no longer limit themselves to people of similar traits.

[Some of what Susan Walsh mentions here may come in the form of serial monogamy, which is growing in popularity as well.]

As the gatekeepers of sex, women soon learned that while they might not hope to marry a man significantly more attractive or higher status than themselves, it is quite possible to command his attention in the short-term – often just for one night. This has led to a sexual “wealth gap” in the population, in accordance with the Pareto Principle. That is, 20% of the men are deemed highly desirable by women. They have the most options for sex, and as a result are the least likely to form committed relationships, especially at a young age. The other 80% struggle to find mates of similar traits, even if they’re willing to offer commitment. I’ve also estimated that about 20% of women are highly promiscuous. They seek short-term male attention. The other 80% recognize that they are unlikely to garner much male attention without offering casual hookups.

In this way, the idea that it’s a “man’s world” or that men have it made is misleading. A small percentage of men have it made. I don’t see any real winners among the women, frankly. Some women do enjoy no-strings sex, and are not seeking a relationship, but many struggle with feelings of regret, depression and low self-esteem.

3. I've heard two basic theories about the future of anything: the pendulum analogy, where things go back and forth from one extreme to the other, and the slippery slope analogy, where once things go downhill, they never return (note to readers: both of these are fallacies in logic). But based on your interaction with people involved in the hook up culture and dating, experience in the pros and cons of each, and knowledge of Western culture, what do you see for the future in terms of (dating/hooking up/seeing each other) interactions between men and women?

That’s a very interesting question, and we debate it at Hooking Up Smart all the time. Personally, I subscribe more to the pendulum theory. History is characterized by large swings in morality, with periods of extreme hedonism followed by more disciplined or restrictive norms. I see hookup culture sticking around for a long while, but there is some backlash already occurring. In the three years I’ve been blogging, college student newspapers have been printing a greater number of editorials by students opposing the culture. One thing that’s interesting to note is that while most students believe it’s common, and that many other students are hooking up regularly, 90% of college students have only 0-5 sexual partners during their four years. So the culture doesn’t really reflect the reality, but it dominates nonetheless.

Another possibility is a crisis in sexual health. STDs continue to spread rapidly, and are becoming increasingly resistant to treatment. HPV is causing cancers in both sexes, and there is a strain of gonorrhea in the UK, which is now considered untreatable. Of course, there’s the very real possibility of a new, opportunistic virus, much as we saw with AIDS in the early 80s. A worsening of the outlook in this area could create behavioral changes.

We’re in uncharted territory, and the Sexual Marketplace feels hostile to most people. My own view is that regardless of what is happening in the culture at large, each individual has the agency to formulate and implement a strategy that is most likely to help them meet their personal mating objectives. At, I’m working on the margins. There are always opportunities in chaos, and hookup culture is no exception.

Wednesday, November 16, 2011

Interview: Sander Daniels of Thumbtack

The responses to the interview questions may not represent the views of The Echo Boom Bomb's author. These interviews are provided to inform readers of information from field experts and provide these experts with a medium where they can answer questions without any content changes. You can also read other interviews at this link.

After my recent article on Forbes, When Will the Education Bubble Explode, I had an email exchange with Sander Daniels of Thumbtack, who had some fascinating information to share about student loans, especially regarding liberal arts versus technical degrees.

Anyone Considering Education: Pay Attention To This Interview

This could end up saving you a huge amount of time and money and provide you with many more opportunities than those who went to a "traditional" school. Or if you know anyone who's considering college, forward/email/Facebook/Tweet this to them immediately.

1. You recently released data "showing that service professionals with a bachelor's degree earn no more than those with a technical college degree." For readers, explain the details and finding of these data and what this means for people considering a bachelor's versus a technical degree..

Thumbtack is an online marketplace for local services. So anyone who offers any kind of local service - from a contractor in Los Angeles, to a portrait photographer in Minneapolis, to an ice cream truck in Houston, etc. - can list themselves on our site. More than 225,000 independent professionals have listed themselves on Thumbtack since 2009.

We surveyed these professionals and asked "What is the highest level of education you have reached?" A little more than 11,000 people responded, with answers ranging from "high school degree" to "doctoral degree".

Since these professionals advertise their services on Thumbtack, they frequently list the price at which they offer their service. For example, this photographer offers her service at $95-195 per hour.

We found something very surprising when we mapped average hourly rate against educational achievement. We expected to see hourly rates rise with a higher level of education, and that's exactly what we found - except that the hourly rate for those with technical degrees and those with undergraduate degrees was exactly the same.

These findings aren't conclusive - perhaps Thumbtack members with technical degrees and undergraduate degrees aren't representative of all people with technical degrees and undergraduate degrees. And there are certainly advantages to getting a broad education at a four-year college over getting a vocational education at a two-year school.

But if I could go back in time and choose between a four-year liberal arts degree and a two-year technical degree, these data would make me think twice. These data at least make it clear that more education doesn't always mean a higher income.

2. You mentioned that you work with a team of Echo Boomers at Thumbtack. What things do you do there at Thumbtack and how can readers, who may be business owners or local merchants, use your services?

Thumbtack is a relatively young company. We're a company of 12 people based in San Francisco. We're all between 25 and 33.

It's a fun place to work - not only do we have an open working environment with a private chef who cooks meals every day, but we also feel like we're creating something truly innovative - and helping out small businesses in doing so.

Thumbtack offers small businesses and independent professionals a home online. It's free to list yourself and advertise your services on our site. In general, people really like the look of their profile - some people spend hours setting it up, filling it out, and making it look nice.

We also bring work to you. If someone comes to our site looking for a caterer for their holiday barbeque, we'll email that job to those in the area who can do that service. This is how we make our money - it costs a bit of money to respond to that client and pitch your services.

In general, the response to Thumbtack has been overwhelmingly positive, and we look forward to coming to work every day. More than 4,000 small businesses list themselves on Thumbtack every week, and a new user signs up on our site every minute of every day.

We love what we do, and encourage you to check us out!

Edit: Updated post to correct links.

Tuesday, November 15, 2011

The Massive Generation Y: Yes, That's 38 Percent

Column Quick Summary:
  • By 2020, Generation Y will own 38% of the votes.
  • Generation Y will continue to have major influence on politics, economics and business even before 2020.
  • No one should underestimate the importance of Generation Y.

From an article:

By 2020, Millennials will comprise 38 percent of the voter base.
As we move toward election season, readers should note the importance of Generation Y on not only this election, but future elections as well (also see Generation Y Is How BIG?). Of course, if 38% of the electorate in the future are Echo Boomers, this will not only change politics, but economic policies and business. Businesses will need to meet the needs and wants of Echo Boomers, and economic policies will be slanted to favor Echo Boomers, as these Echo Boomers have a larger voice.

Knowing the future (through prediction and taking actions on those predictions) is half of the battle in politics, economics and business. If you had known how successful Apple would have been in 1997, imagine how much money you could have made. Likewise, if you want to succeed in politics or business, you must understand this generation because even if your customers or constituents aren't Echo Boomers, they will still have an effect on those who aren't.

Tuesday, November 8, 2011

Like I Wrote: Obama Should Win Generation Y

Column Quick Summary:
  • Among Echo Boomers, Obama trumps Romney.
  • Romney is the GOP front runner for now, and Echo Boomers dislike him.
  • For now, Obama seems to have locked in the Millennial generation for 2012.

I recently asked, is Generation Y dumping Obama? I concluded that Republicans haven't offered the Millennial generation anything to be excited to prefer the Republican over Obama. And a recent study by Pew agrees with me:

Yet according to the Pew Research data released Thursday, Obama remains the overwhelming choice of younger voters when matched against Republican candidate Mitt Romney. Obama currently leads Romney among Millennial voters (ages 18 to 30) by a 61 to 37 percent margin. According to network exit polls, Obama's 2008 margin over Republican nominee John McCain among Millennials was larger (66 to 32 percent), but the president has lost ground across all age groups. The remarkable gap between the youngest and oldest voters' political preferences -- a relatively new phenomenon that first emerged in 2004 -- persists.
And right now, Romney is leading the other Republican nominees (though Cain is catching him).

Unless another candidate takes the lead over Romney (and we see how he or she would stack up against Obama), I don't see any indication that Echo Boomers will jump ship on Obama. Sure his support among the Millennial generation declined some, but it still remains over 60%, and that will have a profound influence on this next election if Echo Boomers vote.

Monday, November 7, 2011

Funny Observation About Generation Y and Marriage

No joke:

Planning a wedding still seems to be a priority for many young people. A recent survey by the Pew Research Center shows that what used to be a highly-valued social institution is now losing its appeal with millennials (ages 18 to 29). The survey found that 52% see good parenting as one of the most important aspects of adult life. Only 30% considered marriage to be that important. Young people today are waiting longer to get married and according to Pew, only 22% of millennials are currently married. More young people care about high-quality parenting than they do about getting married. But these numbers don’t mean that we are curbing our obsession with the world of wedding gowns and engagement rings.

The concept of marriage may mean less to young people today, but the idea of a wedding is just as enchanting as it ever was. On April 29, two billion people across the globe witnessed the royal wedding of Prince William and Kate Middleton.

What makes me laugh about this the most? While working with customers, many Echo Boomers told me that they were saving money for a wedding, but none of them listed marriage as a goal for their life (to be fair, a wedding is a financial goal, whereas a marriage might be considered a financial goal by some). I almost wonder, after reading the above story, if these Echo Boomers only planned to have a wedding for the show of it.

I can't help but think of Satire VI by Juvenal when I read this news.

Are You Ready For the Rent Boom?

Column Quick Summary:
  • Over 20 million Echo Boomers will need some form of housing eventually.
  • Among Echo Boomers, renting is favored over home ownership.
  • Business opportunities abound for those seeking to rent out places for Echo Boomers.

Are you ready for a financial explosion in real estate we haven't seen in a while? When you consider that 27% of Echo Boomers are still living with their relatives (or rent-free), and that this generation holds 80 million members, that's over 20 million new customers for those in the housing industry. One recent article, covering the trends in Canada, points to this fact: some Echo Boomers are beginning to leave their parents' house and move on their own.

However, this trend points to a boom in renting, not home-ownership, as for now, Echo Boomers report renting is preferred over owning a home.

Think Renting Is Misguided?

Think again. While home-ownership has been popular in the past for Americans, this next generation is questioning whether it's always a good idea. Home-ownership make sense for some, but for many, it's a bad idea.

Add to those reports the current financial holdings of Echo Boomers (see Millennial financial data), and you can see they are not prepared to own homes or put money down for down payments (or emergencies).

Still, this news is good for those looking to buy homes, apartments or condos to rent for Echo Boomers. In fact, you might argue that if you handle things in the correct manner, you may be able to generate a better return by renting places out than by investing in the stock market. Of course, that makes some major assumptions, but so does investing in the market.

Friday, November 4, 2011

"What Is the Largest Economic Challenge For Generation Y?"

Each Friday, The Echo Boom Bomb will feature a common question among Echo Boomers and/or their parents concerning economics or finance for the Millennial generation. These questions are often asked by Echo Boomers and/or their parents that I survey or can be directed to my email at echoboombomb [at] gmail [dot] com. If you email a question, please be sure to keep it concise and direct.

Question: What will be the largest economic challenges for Generation Y?

Quick Answer(s):
  • Quick action by policy makers with little reflection.

The Millennial generation will and is suffering through capricious economic policies from politicians and economic leaders. These actions create more uncertainty which begins to feed on itself, creating an environment of instability. Unfortunately, at this present time, Echo Boomers tend to see these same leaders as the "problem solvers" for these disasters. What many Echo Boomers don't realize is that some of these disasters started because of the former policies.

It may take one or two decades for Echo Boomers to recognize that the people they seek to solve their problems are the ones creating their problems. In a sense, more capricious policy - which is already the major economic challenge - will give birth to more. No matter what area you review, unemployment, housing crisis, stock market collapse, these disasters happened because poor policies were in place (for instance, the Subprime Act's influence in the housing crisis).

Thursday, November 3, 2011

The Rise of Renters

Column Quick Summary:
  • Renting is on the rise.
  • In most circumstances, renting offers Echo Boomers - and potentially other Americans - a better housing situation.
  • Builders should be careful before assuming that this means that the United States needs more housing units.

I've write about Millennial Housing frequently and one trend we see among Echo Boomers is the preference to rent. A recent article discusses this rise of renting in the United States, after several decades of more efforts by Americans to increase their home-ownership efforts. The article points out:

The changing demographics also show a significant increase in immigrants, 20-34 year olds, and baby boomers entering the rental market.

Trends aside, for most Echo Boomers, renting is a superior option unless 4 criteria apply to you:

1. You plan to live in your area for a long time. 2. You work at a safe job that's immune from economic problems (for instance, the medical industry). 3. You want a specific home and you have no thought of selling it later. 4. You love buying and selling real estate, so when you take a loss, you can't imagine doing anything else.

For further details, see "Should I Rent Or Buy?"

One final note regarding the rise of renters: there will be a temptation among some to assume that more renters means more rental units, but I expect some Americans (especially Echo Boomers) to approach renting in creative ways. For instance, Jessica from 4 Heteroclite Ways To Save Money (The Millennial Way):

With many goals, an economy with prices rising, and an expensive location, what did Jessica do? She moved in with nine other girls in a five bedroom home.

Wednesday, November 2, 2011

What Do Generation Y Workers Want?

Column Quick Summary:
  • Pleasant co-workers.
  • "Fun" work.
  • Rapid advancement in pay and title.

From an article:

  • Echo Boomers want to be around other employees that are similar to their nature and who are easy to be enjoy. One of the reasons why Echo Boomers don't remain at companies is because they dislike their co-workers. I heard stories like these from customers on a regular basis: an Echo Boomer joins a company, works there for a few months, dislikes a few co-workers, finds a job at another company, quits the former company, and enjoys the new company because of the co-workers (or, dislikes the new co-workers and finds yet another company). Don't expect this to change either: Echo Boomers who have options and are in demand will exercise these options if they dislike their co-workers.
  • The Millennial generation seeks "fun" work. While some companies and executives might misunderstand what "fun" means in a professional context, you can replace the word "fun" with exciting. During my years at Texas Tech, I witnessed Echo Boomers coming alive when their work excited them (do not misread this as "challenged" as Echo Boomers do not see challenging as a synonym for exciting); a company can measure excitement through enthusiasm. No enthusiasm? The work fails to excite your workers. There are usually two approaches that some will try: (1) "Too bad, get back to work" (2) "How can we make our work exciting so it appeals to our workers?" The second case, while initially requiring more effort, will keep Millennial employees at your company.

    On the flip side, in some business contexts, the second works better than the first (for instance, how can you make cleaning toilets feel exciting?).

  • Echo Boomers want to be CEO ... tomorrow. For the record, this is not new information, as others have whined that this attitude reflects the result of the spoiling of Echo Boomers. In some cases, like this one, quick advancement may not be possible and if Echo Boomers are unable to deal with it, they can move to another company. I would advise that companies treat Millennial requests for advancements by evaluating what they've done for the company - if you can't afford to lose them, let them advance. Focus on results.

What this article explains (without directly stating so) is why many in the Millennial generation are pursuing entrepreneurship. I would expect this trend to continue as Echo Boomers may find corporate life unappealing even after job hopping for a while.

Tuesday, November 1, 2011

The Business Model of the Future

Making Billions Through Convincing Consumers To Invest Their Time

Column Quick Summary:
  • New Business Rule: Make consumers invest their time in your product.
  • When consumers invest time, even small amounts a day, they tend to remain.
  • With every product or service, ask how you can make consumers invest their time in your product.

Echo Boomers have complained multiple times about Facebook when the company changes things. When I attended Texas Tech University and Facebook was beginning to grow in popularity, Facebook added a new feature that involved instant updates. College students (especially at Texas Tech) screamed: this new feature was stalker friendly. A few closed their accounts, only to re-join Facebook a few days later. Even though Facebook has done this multiple times - creating features that annoy its users - most Echo Boomers, and others, still use Facebook. Why is it that Facebook continues to attract and hold its consumers even after it angers them?

Zuckerberg, whether he knows it or not, has created a new business rule that few businesses recognize. This business rule is simple: make consumers invest their time in your product. Most consumers won't leave Facebook and join other social networks simply because it took a massive amount of time to add friends, adjust their features, build personal albums, et cetera. In other words, there's a major emotional cost to leaving Facebook. Trust me, the more people invest emotional energy into Facebook, the less likely they are to leave (and, ironically, the more likely they are to continue investing emotional energy into Facebook).

Many businesses fail to consider this time-investment model. They make it easy and quick for consumers to get access to their product and thus the consumer feels disconnected to the purchase (in some instances, like necessities, this may be a good thing). Other companies bombard their consumers with advertisements, emails, calls, et cetera with the hope of keeping their customers interested in the latest gadget. Amazon, for instance, is a company that performs this well, yet Amazon hasn't considered that the people who review its books, for instance, are more likely to do business with them than the people who don't (time being invested).

Once you recognize what you're trying to sell, the question you should ask in today's world is, "How can I get customers continually invested with their time in this product [or service]?" As consumers spend more time with your products or services, you'll find that they tend to remain and help you bring larger profits.